Warren Buffett says that the best way for most people to invest is to simply buy index funds.
So… what’s an index fund and how do they work?
Here’s everything you need to know:
So… what’s an index fund and how do they work?
Here’s everything you need to know:
Index funds are one of the greatest tools ever created for retail investors.
They allow you invest in hundreds/thousands of companies at a time all in a single investment.
Diversifying your portfolio and managing risk has never been easier.
They allow you invest in hundreds/thousands of companies at a time all in a single investment.
Diversifying your portfolio and managing risk has never been easier.
Let’s use investing into an S&P 500 index fund for example.
$1,000 in this fund would be like investing:
$76 in Apple $AAPL
$65 in Microsoft $MSFT
$38 in Google $GOOGL
$31 in Amazon $AMZN
$30 in NVIDIA $NVDA
$19 in Tesla $TSLA
And $741 spread among the other 496 companies.
$1,000 in this fund would be like investing:
$76 in Apple $AAPL
$65 in Microsoft $MSFT
$38 in Google $GOOGL
$31 in Amazon $AMZN
$30 in NVIDIA $NVDA
$19 in Tesla $TSLA
And $741 spread among the other 496 companies.
But it gets better.
These index funds have professional managers who automatically adjust the % of each company’s weighting in the fund based on their performance.
This constant reallocation ensures that your money is always being invested into the best companies.
These index funds have professional managers who automatically adjust the % of each company’s weighting in the fund based on their performance.
This constant reallocation ensures that your money is always being invested into the best companies.
Individual stock picking seems easy, but to successfully do it for decades is very difficult.
Things are always changing.
Some older companies lose their significance (ie. IBM)
While other new companies go public and skyrocket to the top (ie. Tesla)
Things are always changing.
Some older companies lose their significance (ie. IBM)
While other new companies go public and skyrocket to the top (ie. Tesla)
You can save yourself so much time and stress by utilizing index funds to become a successful stock market investor.
You won’t have to worry about managing your portfolio at all as it’s all done for you for a professional.
You can just sit back and watch your money grow.
You won’t have to worry about managing your portfolio at all as it’s all done for you for a professional.
You can just sit back and watch your money grow.
Over the last 96 years, the stock market has averaged an annual 11% annual return (including dividends)
The stock market is one of the most proven and resilient wealth building tools we have (even with every bear market and recession ever thrown at it)
The stock market is one of the most proven and resilient wealth building tools we have (even with every bear market and recession ever thrown at it)
So to become wealthy, just combine a consistent investing strategy with patience.
Compound interest and time will do the rest
School didn’t teach you this stuff, but I will:
• Follow me @LTI_finance
• Like & Retweet
• Subscribe to my FREE newsletter
MarkTalksMoney.com
Compound interest and time will do the rest
School didn’t teach you this stuff, but I will:
• Follow me @LTI_finance
• Like & Retweet
• Subscribe to my FREE newsletter
MarkTalksMoney.com
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